The truth about your auto no fault


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Right Now members in the Michigan House of Representatives are trying to abolish the Michigan Auto No-fault System. Click here to learn more

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The truth about your auto no fault

  1. 1. The Truth About Your Auto No-Fault<br />What You Don’t Know Will Hurt You<br />
  2. 2. What’s going down<br />Your representative in the Michigan Congress is about to vote on a bill (HB4936) that affects everyone in the State of Michigan. It affects you and your family. This Bill will essentially abolish the Michigan auto no-fault system and put you, your family and friends at serious risk.<br />The House Insurance Committee has constructed a bill that has stripped you of all of your voting rights on this issue.<br />In the past, Michigan residents have voted against this as a proposal on the ballot. This time you are not going to have the chance to vote, because your representative said that you voted for them to make these decisions for you.<br />I don’t know about you, but I don’t remember my Representative telling me that they were going to dismantle our auto no-fault system, during their election campaign. Remember, back when your opinion mattered.<br />
  3. 3. Your Biggest Fear<br />I think most of us would agree that the biggest risk that we take in our everyday lives, is when we are driving in our automobiles.<br />Think about it, when throughout your day are you and your family members really taking the most risk of suffering a serious, sometimes catastrophic injury?<br />The residents of Michigan are the smartest people in the United States when it comes to dealing with this.<br />Now our biggest fear, is that we’re going to lose our protection, the Michigan Auto No-fault System.<br />
  4. 4. Why is Michigan the only one?<br />I wish I could tell you how many times I have heard, “Well, they’re not doing it like that in the other 49 states, so why should it be like that in Michigan.”<br />I’m sorry but only one can be the leader and the rest will follow. Our auto no-fault system is known as the best in the country, by far.<br />
  5. 5. Michigan MCCA History<br />The Michigan Catastrophic Claims Association (MCCA), a private non-profit unincorporated association, was created by the state Legislature in 1973.<br />Michigan residents took it upon themselves to create a self-sustaining system that would protect and take care of them every time they got into an automobile, taking the biggest risks of their daily lives.<br />Every year, when you pay your auto insurance, you pay for MCCA benefits known as PIP benefits.<br />
  6. 6. PIP Benefits<br />What are PIP benefits and what do they provide for me?<br />Personal Injury Protection benefits provide you with benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle, and PIP benefits protect you from being sued as the result of an auto accident.<br />
  7. 7. Main Benefits of PIP<br />1. Personal injury protection benefits will pay for all reasonably necessary costs for your care, recovery, and rehabilitation expenses resulting from injuries sustained by an automobile accident .<br />2. The no-fault law protects Michigan drivers from being sued as the result of an auto accident. <br />Without protection, either one of these two situations could potentially bankrupt your family for generations.<br />
  8. 8. Michigan Catastrophic Claims Association<br />Currently residents pay $145 annually to the MCCA for PIP benefits on each auto insurance policy that they purchase for a vehicle registered in the State of Michigan.<br />This means that Michigan residents have found a way to cover the biggest risk they take in their daily lives for about $20 a month. Sounds like a good deal to me, I know that I pay almost $10/month for insurance on my cell phone.<br />
  9. 9. It’s Your Money<br />The Michigan Catastrophic Claims Association currently has approximately $13.8 Billion of your money in assets, consisting mainly of stocks and bonds.<br />Where did the $13.8 Billion come from?<br /> You, your Mother, Father, Grandmother, Grandfather, Aunts, Uncle’s and your kids. Anyone that has paid car insurance in Michigan in the last 38 years.<br />
  10. 10. Let’s do the math 2010<br />8.1 million registered vehicles according to the Michigan DMV in 2010.<br />Take away the 15% uninsured vehicles, and that leaves approximately 7million vehicle policies paid PIP benefits of $145/vehicle.<br />7,000,000 X $145 = $1,015,000,000<br />MCCA took in approximately $1.015 Billion in MI resident policy revenue alone in 2010.<br />
  11. 11. Still doing the math<br />Take the 1.015 Billion collected on Michigan residents auto Pip benefits in 2010.<br />Then the MCCA paid out approximately $800 million in claims for catastrophically injured auto accident patients, in 2010.<br />This means that the MCCA took in $200 million more than it paid out in claims, in just insurance policy revenue alone in 2010.<br />Remember, we still have 13.8 Billion in assets that should collect interest income annually.<br />
  12. 12. Michigan’s Got It Right<br />Essentially, what this means is that the Michigan residents have found a way to cover the biggest risk that they take in their daily lives for approximately $20 a month.<br />In the process, we have created a safety fund that has $13.8 billion, has increased its assets every year rising by over $200 million in 2010, and has only had to pay out $8 billion in total claims since 1973.<br />I think the residents of Michigan are a little smarter than people think.<br />
  13. 13. Where is the savings?<br />According to current statistics Michigan’s average auto insurance policy has increased to nearly $2,541 a year.<br />Only $145 of your policy premium pays for your PIP benefits.<br />How much could you potentially gain by giving up your Pip benefits, when they only account for less than 6% of your premium???<br />Why is the rest of your policy costing you so much??? <br />
  14. 14. Same old story<br />The insurance industry wants you to believe that our system is unsustainable according to their statistics. It just doesn’t have enough money.<br />This isn’t the first time that we have heard this story from the insurance industry. In 1992, their experts had statistics that said our system was unsustainable and they needed to cap your benefits.<br />This appeared on the 1992 ballot as Proposal D and was defeated by the Michigan voters.<br />
  15. 15. Here we go again<br />Then again in 1993, those same experts said the system was unsustainable and couldn’t continue to survive at the pace of the growth of the claims.<br />Proposal C on the November 1994 ballot wanted to cap your benefits and impose a fee schedule. Voters again rejected the proposal.<br />
  16. 16. Oops, our mistake<br />Then in 1998, Insurers realized that their projections and figures were wrong, and there was actually too much money in the MCCA fund. <br />At this time there was approximately $2.5 billion in assets and approximately $200 million in claims.<br />A 12 to 1, equity to expense ratio.<br />On June 30, 1998, after the passage of the refund legislation, the MCCA proceeded with a $1.2 billion refund. Refunding half of the total assets.<br />
  17. 17. Here We Are Today<br />Now, let’s fast forward to today. Here we are again listening to the same type of experts, from the insurance industry, telling us that our fund is in trouble. It’s simply unsustainable and they need to cap your benefits and impose fee schedules.<br />Again, the numbers just are not adding up. The growth of the amount of the claims has slowed in growth this decade from the previous decade, and we have a better equity to expense ratio, than when the refund was issued in 1998.<br />
  18. 18. MCCA Stability<br />From 1984 to 1994 the amount of the claims grew by approximately a 1000% increase.<br />From 2000 to 2010 the amount of the claims have grown by less than a 300% increase.<br />In 1998 when everyone agreed the fund had too much money, $2.5 billion assets with $200 million claims, an equity to expense ratio 12 to 1. A refund was issued.<br />Now in 2010, the fund has $13.8 billion assets with $800 million claims, an equity to expense ratio of 17 to 1. Now, they are saying that the fund is insolvent??? It just doesn’t add up.<br />
  19. 19. What’s not in their projections?<br />A couple reasons why their numbers may not be adding up is because their projections probably aren’t taking into account the patients that rehabilitate or the mortality rate of other patients.<br />Our system has been designed to give you the best possible chance to rehabilitate and get integrated back into society, should you or one of your family members get seriously injured in a car accident.<br />
  20. 20. What’s not in their projections?<br />They say that, 1% of the people injured, spend approximately 30% of the money. But these people have the most serious injuries, and have many costly bills. Many times they are hospitalized for most of the first 3 years of injury. And then many are lucky to survive only a couple of years after leaving the hospital and rehabilitation.<br />As some of these patients become stabilized, through establishing a plan of care and moving back into their homes, many times the amount of their medical bills will begin going down over time.<br />
  21. 21. The automobile industry contribution<br />One other thing that we don’t see in their predictions, is that the auto industry has made great strides in making travel safer for us since 1973. Adding multiple airbags in vehicles is just one example.<br />In fact, according to the Michigan State Police, in the last decade from 2000 to 2010 auto accidents in the State of Michigan have fallen by 31.5%.<br />
  22. 22. What’s their solution<br />Put a cap on the amount of medical benefits you can receive from the MCCA.<br />Eventually shifting all of the existing and new patients medical expenses from the MCCA to the Medicaid system.<br />Impose a fee schedule similar to Workman Compensation, on medical providers, cutting their reimbursement from the MCCA by as much as 30% to 40%.<br />Eliminate the Michigan auto no-fault system as you know it. Exposing you to potential lawsuits from other drivers and capping your benefits.<br />
  23. 23. Putting a cap on your benefits<br />Currently Michigan residents that are catastrophically injured in automobile accidents will receive lifetime benefits for their care, recovery and rehabilitation expenses.<br />MCCA PIP benefits will cover you and your family while traveling in your automobile. If one of your children were to be catastrophically injured in a car accident, right now you have the comfort of knowing that their medical expenses would be covered for the rest of their life, or for as long as they require care for their accident related injuries.<br />Putting a cap on your benefits means that once your medical expenses reach a certain dollar amount, you will then be forced onto the Medicaid or welfare system.<br />
  24. 24. Their Michigan Medicaid solution<br />According to the governors Michigan Medicaid Budget for FY 2011, the Michigan Medicaid system has a projected shortfall of $1.5 billion.<br />Does it sound fiscally smart to take patients out of a system that has $13.8 billion in the bank and at least $200 million positive revenue this year, and place them into a system that has a $1.5 billion shortfall??<br /> Also, the current Medicaid system isn’t designed to handle the auto no-fault patients. A lot of the services that auto no-fault patients receive, are not currently covered by Medicaid. How much is it going to cost Medicaid to make these changes, and manage the new patients cases??<br />Today, the Medicaid system cannot afford this. And now is not the time to add costs to Michigan Medicaid, regardless of what people think future projections might be.<br />
  25. 25. Their fee schedule solution<br />Probably one of the worst decisions that the state of Michigan could make right now would be to cut revenue to the healthcare industry. Costing many Michigan residents good paying jobs.<br />Michigan is currently ranked 49th with an unemployment rate of 11.2%.<br />Growing by a healthy 25%, the health-care industry is one of the only major industry sectors to post job gains in the last decade.<br />Using the Workman Compensation fee schedule isn’t going to work because catastrophically injured patients require more specialized care than most workman compensation patients, due to the severity of their injuries.<br />With all of the employment problems in Michigan, now is not the time to make an unnecessary revenue cut to the healthcare industry from the MCCA.<br />
  26. 26. The choice is clear<br />As a resident of the State of the Michigan, I don’t think changing our no-fault system is a good idea. <br />What are the potential gains? <br /> There isn’t one guaranteed in the Bill.<br />What do we stand to lose? <br /> A lifetime of benefits accumulated by our current and past family members and friends, to be there should one of their loved ones get injured in a car accident.<br /> Immunity in exchange for exposure to lawsuits as a result of a car accident. Forcing you to now buy additional liability insurance with each auto policy.<br />
  27. 27. Don’t just sit there<br />If we allow this legislation to pass, then this is just another example of the Michigan residents allowing our state government to stand on the side of big corporations and big money, and against the hard working family people.<br />It is unconstitutional to construct a Bill that does not to allow the Michigan citizens the opportunity to move forward with a referendum, to vote on legislation that affects every single Michigan resident.<br />
  28. 28. Take Action Today!!<br />If you want the House of Representatives to leave our auto no-fault system alone, then you need to act now. This is not the time to wait and see what everybody else does.<br />Michigan needs to continue to set the example for how to deal with the risks associated with automobile travel.<br />Begin contacting all of the representatives in the Michigan House and tell them to leave our auto no-fault system alone and vote No on House Bill 4936.<br />
  29. 29. MI House Of Representatives Contact List<br />Look for your representative and contact them<br />Bledsoe, Timothy (D) Grosse Pointe, MI 517-373-0154<br />Howze, Lisa (D) Detroit 517-373-0106<br />Talabi, Alberta (D) Detroit 517-373-1776<br />Stapleton, Maureen (D) Detroit 517-373-1008<br />Olumba, John (D) Detroit 517-373-0144<br />Durhal Jr., Frederick (D) Detroit 517-373-0844<br />Womack, James (D) Detroit 517-373-0589<br />Stallworth III, Thomas (D) Detroit 517-373-2276<br />Jackson, Shanelle (D) Detroit 517-373-1705<br />Santana, Harvey (D) Detroit 517-373-6990<br />Nathan, David (D) Detroit 517-373-3815<br />Tlaib, Rashida (D) Detroit 517-373-0823<br />Kandrevas, Andrew (D) Southgate 517-373-0845<br />
  30. 30. MI House of RepresentativesContact List<br />Clemente, Paul (D) Lincoln Park 517-373-0140<br />Darany, George (D) Dearborn 517-373-0847<br />Constan, Bob (D) Garden City 517-373-0849<br />Cavanagh, Phil (D) Redford 517-373-0857<br />LeBlanc, Richard (D) Westland 517-373-2576<br />Walsh, John (R) Livonia 517-373-3920<br />Heise, Kurt (R) Plymouth 517-373-3816<br />Slavens, Dian (D) Canton 517-373-2575<br />Geiss, Douglas (D) Taylor 517-373-0852<br />Somerville, Pat (R) New Boston 517-373-0855<br />Forlini, Anthony (R) Harrison Township<br />Switalski, Jon (D) Warren<br />Townsend, Jim (D) Royal Oak 517-373-3818<br />Lipton, Ellen (D) Huntington Woods 517-373-0478<br />Liss, Lesia (D) Warren 517-373-2275<br />
  31. 31. MI House of RepresentativesContact List<br />Farrington, Jeff (R) Utica 517-373-7768<br />Lane, Marilyn (D) Fraser 517-373-0159<br />LaFontaine, Andrea (R) Richmond 517-373-8931<br />Goike, Ken (R) Ray 517-373-0820<br />Stanley, Woodrow (D) Flint 517-373-8808<br />Hobbs, Rudy (D) Southfield 517-373-1788<br />Lund, Peter (R) Shelby Township 517-373-0843<br />Barnett, Vicki (D) Farmington Hills 517-373-1793<br />Crawford, Hugh (R) Novi 517-373-0827<br />Brown, Lisa (D) West Bloomfield 517-373-1799<br />Moss, Charles(R) Birmingham 517-373-8670<br />Knollenberg, Martin (R) Troy 517-373-1783<br />Haugh, Harold (D) Roseville 517-373-0854<br />Haines, Gail (R) Waterford 517-373-0615<br />Kowall, Eileen (R) White Lake 517-373-2616<br />
  32. 32. MI House of RepresentativesContact List<br />McMillin, Tom (R) Rochester Hills 517-373-1773<br />Jacobsen, Bradford (R) Oxford 517-373-1798<br />Denby, Cynthia (R) Handy Township 517-373-8835<br />Hammel, Richard (D) Mt. Morris Township 517-373-7557<br />Ananich, Jim (D) Flint 517-373-7515<br />Smiley, Charles (D) Burton 517-373-3906<br />Scott, Paul (R) Grand Blanc 517-373-1780<br />Ouimet, Mark (R) Scio Township 517-373-0828<br />Irwin, Jeff (D) Ann Arbor 517-373-2577<br />Rutledge, David (D) Ypsilanti 517-373-1771<br />Olson, Rick (R) Saline 517-373-1792<br />Zorn, Dale (R) Ida 517-373-2617<br />Jenkins, Nancy (R) Clayton 517-373-1706<br />Kurtz, Kenneth (R) Coldwater 517-373-1794<br />Lori, Matthew(R) Constantine 517-373-0832<br />
  33. 33. MI House of RepresentativesContact List<br />McCann, Sean (D) Kalamazoo 517-373-1785<br />O'Brien, Margaret (R) Portage 517-373-1774<br />Segal, Kate (D) Battle Creek 517-373-0555<br />Bolger, Jase (R) Marshall 517-373-1787<br />Poleski, Earl (R) Jackson 517-373-1795<br />Shirkey, Michael (R) Clarklake 517-373-1775<br />Rogers, William (R) Brighton 517-373-1784<br />Byrum, Barb (D) Onondaga 517-373-0587<br />Bauer, Joan (D) Lansing 517-373-0826<br />Meadows, Mark (D) East Lansing 517-373-1786<br />Outman, Rick (R) Six Lakes 517-373-0834<br />Shaughnessy, Deb (R) Charlotte 517-373-0853<br />Yonker, Ken (R) Caledonia 517-373-0840<br />MacGregor, Peter (R) Rockford 517-373-0218<br />Agema, David (R) Granville 517-373-8900<br />
  34. 34. MI House of RepresentativesContact List<br />Dillon, Brandon (D) Grand Rapids 517-373-2668<br />Schmidt, Roy (D) Grand Rapids 517-373-0822<br />Hooker, Thomas (R) Byron Center 517-373-2277<br />Tyler, Sharon (R) Niles 517-373-1796<br />Pscholka, Al (R) Stevensville 517-373-1403<br />Nesbitt, Aric (R) Lawton 517-373-0839<br />Gilbert II, Judson (R) Algonac 517-373-1790<br />Daley, Kevin (R) Lum 517-373-1800<br />Muxlow, Paul (R) Brown city 517-373-0835<br />Damrow, Kurt (R) Port Austin 517-373-0476<br />Glardon, Ben (R) Owosso 517-373-0841<br />Lyons, Lisa (R) Alto 517-373-0846<br />Callton, Mike (R) Nashville 517-373-0842<br />Genetski II, Robert (R) Saugatuck517-373-0836<br />Price, Amanda (R) Park Township 517-373-0838<br />
  35. 35. MI House of RepresentativesContact List<br />Haveman, Joseph (R) Holland 517-373-0830<br />Hughes, Holly (R) Montague 517-373-3436<br />Hovey-Wright, Marcia (D) Muskegon 517-373-2646<br />Opsommer, Paul (R) Dewitt 517-373-1778<br />Horn, Kenneth (R) Frankenmuth 517-373-0837<br />Oakes, Stacy (D) Saginaw 517-373-0152<br />Brunner, Charles(D) Bay City 517-373-0158<br />Johnson, Joel (R) Clare 517-373-8962<br />Stamas, Jim (R) Midland 517-373-1791<br />Cotter, Kevin (R) Mount Pleasant 517-373-1789<br />Bumstead, Jon (R) Newaygo 517-373-7317<br />Franz, Ray (R) Onekama 517-373-0825<br />Potvin, Phil (R) Cadillac 517-373-1747<br />Rendon, Bruce (R) Lake City 517-373-3817<br />Schmidt, Wayne (R) Traverse City 517-373-1766<br />
  36. 36. MI House of RepresentativesContact List<br />MacMaster, Greg (R) kewadin 517-373-0829<br />Pettalia, Peter (R) Presque Isle 517-373-0833<br />Foster, Frank (R) Pellston 517-373-2629<br />McBroom, Ed (R) Vulcan 517-373-0156<br />Lindberg, Steven (D) Marquette 517-373-0498<br />Huuki, Matt (R) Atlantic Mine 517-373-0850<br />